Irregularities of Rs6,085.4m detected in PIA accounts

LAHORE: The Directorate General, Commercial Audit and Evaluation (South), Karachi, a department of the Auditor General of Pakistan, has noticed 16 major irregularities to the tune of Rs 6085.419 million in the accounts of Pakistan International Airlines (PIA), documents available with the “Jang Group and Geo Television Network reveal, though the national airline’s human resource officer has requested the state auditors to ignore and hush up any such complaints against his organisation or bosses.

According to a January 28, 2020 letter (Reference Number: 307/Dir-III/AC-III/AIR/PIAC-Isb&Khi/2019), written by Muhammad Yaseen, director at the Directorate General Commercial Audit and Evaluation (South), Karachi, and addressed to Air Marshal Arshad Mahmood Malik, chief executive officer of the Pakistan International Airlines (PIA), financial irregularities to the tune of over Rs6 billion (Rs 6085.419 million to be precise) have been noticed in the financial accounts of the national flag carrier and reported.

Besides financial irregularities, numerous serious violations of rules and regulations have also been noticed and reported in the hiring, promotions and postings of the staffers of the national airline, whose 87 percent shares are being owned by the government of Pakistan.

According to the letter from a employee of the Directorate General Commercial Audit and Evaluation (South), Karachi, the Arshad Mahmood Malik-led PIA top brass has been guilty of irregular procurement of services on account of development of indigenous IFE Solutions that has resulted in dubious financial deal of Rs700 million.

The PIA management had allegedly awarded a contract of Rs700 million to a company which was registered only two months ago.

The Directorate General Commercial Audit and Evaluation (South), Karachi, has audited PIA’s accounts and scrutinised its affairs, after it had received multiple complaints regarding accounts of Pakistan International Airlines Corporation in Islamabad and Karachi.

The Directorate General has thus observed that PIA has suffered an operating loss amounting to Rs5,282 million, noticing that the appointment of the national airliner’s CEO was irregular and dual benefits worth Rs2.995 million were rewarded to him against rules, PIA had suffered a loss of Rs71.866 million due to illegitimate elevation of allowances and benefits of officers on deputation from Pakistan Air Force, the national flag carrier had suffered another loss of Rs1.24 million due to the holding of dual jobs/services by a regular employee of PIACL and withdrawal of unjustified salaries from both sides by him and then the fraudulent settlement of advances paid to the district managers of PIA, Rawalpindi, had inflicted a loss of Rs 1.638 million to the organisation.

The audit report has also shed light on the unethical appointment of the incumbent acting chief internal auditor of PIA, irregular award or promotion of a contractual employee, irregular/back-dated promotion of an assistant manager, the irregular promotion and transfer of a PIA manager, the irregular extension of a chief commercial officer of PIA, the irregular retention and continuation of service by PIA employee at flight operation after declaration of a bogus degree/certificate, the irregular retention and continuation of service by PIA employee at Madina station after declaration of a bogus degree/certificate and the irregular induction of staff on fake degrees, all of which has cost Rs 25.68 million to the national airline.

Following this January 28, 2020 audit report issued by Directorate General Commercial Audit and Evaluation (South), a department of the Auditor General of Pakistan, Air Commodore Amer Altaf, PIA’s chief human resource officer, has sent a letter (Reference Number: AGP/Govt.Adt/CHRO/2020) and dated February 4, 2020 to the Director General Commercial Audit and Evaluation (South).

When contacted for a version and comments, Air Marshal Arshad Mahmood Malik, CEO of the Pakistan International Airlines, had furnished copy of PIA’s chief human resource officer, Air Commodore Amer Altaf’s letter to this correspondent.

Air Commodore Amer Altaf’s letter reads: “This is in continuation to our earlier correspondence on the subject with the assurance that this management has taken the observations raised by the office of the Auditor General of Pakistan most seriously.

In fact, we believe that an audit oversight helps bring about a positive process or system improvement, hence we again assure you of our fullest cooperation. However, vide our letter number Govt. Adt. CHRO/2019/II/925 dated December 20, 2019, copy enclosed for ready reference, we had highlighted some issues/key concerns and sought additional details, an answer to which is still pending or a formal reply awaited. Audit paras, however, since then have been issued without addressing the matter and have now been received at this office”.

The letter continues: “We believe that the intent of carrying out the audit and action taken on anonymous complaints indicates mala fide on part of some of the disgruntled employees of this company who intend to challenge the writ of the management and sidetrack us from our turnaround initiatives, which Alhamdolillah had started to bear fruit.

The echoes of these are being repeatedly heard in the corridors of our head office at Karachi, with many claiming to fix the management for bringing order or discipline to the ranks and file within the company. It is this fact that brings me to the issue of credibility of these claims which were highlighted in our previous correspondence”.

PIA’s human resource officer, Air Commodore Amer Altaf, further states: “As stipulated vide a circular issued by the office of the Auditor General of Pakistan, dated December 21, 2016, on the subject of “Anonymous/Pseudonymous Complaint Policy” under circular number 126/RVMT/Vig/CGA/12-C2015/Vol.III, categorically instructing AGP (Auditor General of Pakistan) personnel to ignore anonymous or pseudonymous complaints”.

He further urged in his letter addressed to the relevant officer of the Directorate General Commercial Audit and Evaluation (South) that the complaints received through anonymous or pseudonymous sources should be ignored, antecedents and credentials of a complaint should be verified before an inquiry was instituted against the officials concerned, no application containing mere allegations should be entertained unless it was accompanied by an affidavit from the applicant that all facts stated in his complaint were true, and if his affidavit proves false, legal action should be taken against him.

Moreover, newspapers publishing baseless allegations should be dealt in accordance with the law. In his very recent February 4 letter, PIA’s human resource officer has asserted: “In view of the foregoing, it is hereby requested that the complaint letters may kindly be ignored and audit paras quashed as it is a violation of Auditor General’s defined rules of business and as clearly stipulated in the Gazette. In the end, allow me to reiterate once again our unfettered support and assurance of full cooperation to the office of the Auditor General of Pakistan”.

It is imperative to note that on January 21 this year, the Supreme Court had upheld the decision of the Sindh High Court, whereby restraining Air Marshal Arshad Mahmood Malik from discharging his duties as the chief executive officer of the Pakistan International Airlines. A three-member apex court bench, headed by Chief Justice Gulzar Ahmed, and comprising Justice Ijazul Ahsan and Justice Sajjad Ali Shah, had dismissed the petition, filed by Malik, challenging the SHC verdict.

The petitioner had submitted that Air Marshal Malik did not have the academic qualifications required for the post, adding that he did not have any experience with regard to airlines either. The PIA CEO, Arshad Malik, had then moved the Supreme Court, while challenging the Sindh High Court verdict.

The Supreme Court had then assigned the task of running the national flag carrier to the PIA’s board of governors, with the ruling that it would exercise the powers of CEO and chairman of the PIA.

During the course of hearing, Chief Justice of Pakistan, Gulzar Ahmed, had observed that PIA was a national asset, and not personal property of anyone, adding that a case was pending before the apex court pertaining to determining the procedure for appointment of chairman of the national flag carrier.

The court also expressed grave concerns over Rs700 million contract reportedly awarded by PIA to a retired Pakistan Air Force officer. “We will not set aside the verdict of the Sindh High Court, which had restrained Air Marshal Arshad Mahmood Malik from functioning as the PIA CEO,” the chief justice had remarked.